Tyson Law Blog

Welcome to the glamorous world of incorporation mechanics.

Common stock does not sound exciting. Preferred stock does. First-time founders are looking for excitement—especially when it comes to their millions of initial shares—and so they’re often surprised to hear that they’ll be receiving common, rather than preferred stock when the startup is incorporated.

Warning: basic arithmetic inside.

When it comes to stock option grants, it’s much easier and cheaper to set up a system up front to do this correctly than it is to try to troubleshoot down the road.

Startups should set up a data room as soon as possible where all of its legal documents will live in a structure meant to facilitate due diligence.

Having written this post, I am quite hungry.

Bad visual puns aside, the impact of a change of control on stock vesting is actually really important to understand, whether you’re a startup founder, key hire, or investor.

While using “finders fees” to help raise investment for startups seems innocent enough, it’s actually a regulatory minefield that should either be avoided altogether or navigated with extreme caution.

A startup founder licensing IP to the startup is like buying a hot tub: you can do it, but you probably shouldn’t.